Giorgetti critiques European Central Bank rate hikes as ineffective against supply-driven inflation

Italy’s Finance Minister Giancarlo Giorgetti is picking a very public fight with the European Central Bank, and his argument is straightforward: you can’t fix a supply problem by crushing demand. After the ECB raised its deposit facility rate by 25 basis points to 2.5% on September 10, Giorgetti fired back on September 18, calling the rate hikes ineffective against inflation that he says is fundamentally driven by energy supply shocks. Euro-area inflation hit 3.3% in August, up from 2.9% in July, with energy prices surging 14.3% and doing most of the heavy lifting. The supply-side argument The Italian finance minister characterized the current inflationary environment as an “offer shock,” rooted in geopolitical disruption including the ongoing war in Ukraine. His point: making credit more expensive doesn’t produce more natural gas or stabilize shipping routes. This isn’t a new position for Giorgetti. He raised similar concerns back in March 2026, warning against rate increases driven by energy price spikes following the Ukraine crisis. The ECB went ahead with hikes anyway, and inflation has continued climbing. Higher rates do have a marginal cooling effect on prices by dampening ec...